Firms receive fuel refunds

16 Apr, 2019 - 00:04 0 Views
Firms receive fuel refunds Regulator Zera sets maximum prices using a formula that starts with the actual landed cost of fuel, then adjusted in recent weeks by the falling taxes the Government is charging as it tries to stabilise prices.

The Herald

Business Reporter
Government has started processing refunds on the fuel Excise duty component of higher fuel prices incurred by businesses after the Government hiked fuel prices in January to curb speculative buying that was worsening fuel shortages.

The Zimbabwe Revenue Authority, which is the processing agent, said the refund follows promulgation of Statutory Instrument 72 of 2019 (Customs and Excise) fuel supplies to approved beneficiaries.

Zimra said all applications for fuel Excise duty refund claims should be submitted to the State revenue collector before June 30, 2019.

“The refund is provided for in terms of section 120, as ready with section 125 of the Customs and Excise Act and applies to leaded and unleaded petrol, power kerosene, illuminating or heating kerosene and diesel fuels purchased from January 13 to February 22, 2019,” Zimra said in a statement at the weekend.

The fuel Excise duty refund relates to the difference between the fuel Excise duty that prevailed following the fuel price hike in January this year and Excise duty that existed before January 13, 2019.

Beneficiaries must not have increased prices of goods or services following the fuel price hike, be tax registered and compliant, be members of a recognised business member group and should prove that the fuel went to productive use.

“The fuel refund facility will only benefit approved beneficiaries in the agriculture, mining, manufacturing, transport and mining sectors who have successfully registered with Zimbabwe Revenue Authority through their respective business associations,” Zimra said.

Government came up with the policy on the fuel duty refund to ensure business operators did not increase prices relative to the fuel price increase in January, which would have spawned a pricing chaos.

Local businesses have become speculative in the pricing, a mentality they carried over from the high inflation decade to 2008, which puts products beyond the reach of many and exerts pressure on current inflation levels.

Fuel prices rose in January following the imposition of new higher duty rates along with a formula which sets the fuel price each week with fixed costs and mark-ups per litre and the only variation being in the , as Government sought to eradicate speculation landed cost

Government raised duty on fuel saying the price increase was necessary to curb smuggling into the region where it was pricier by those seeking foreign currency earnings.

Prior to the fuel price adjustment, Zimbabwe’s fuel sold at an average of US$0,60 per litre when the price was more than double in the region, which saw a growing number of vehicles from the region fuelling in the country.

Individuals seized the opportunity, engaging in arbitrage that included converting US dollars into local forms of currency then buying fuel and reselling in the region in hard currency, which worsened shortages in the country.

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